The Best Cities For Jobs

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This year's "best places for jobs" list is easily the most depressing since we began compiling our annual rankings almost a decade ago. In the past--even in bad years--there were always stalwart areas creating lots of new jobs. In 2007's survey 283 out of 393 metros areas showed job growth, and those at the top were often growing employment by at least 5% to 6%. Last year the number dropped to 63. This year's survey, measuring growth from January 2009 to January 2010, found only 13 metros with any growth.

Mike Shires at the Pepperdine School of Public Policy, who develops the survey, calls it "an awful year." Making it even worse, the source of new jobs in almost all areas were either government employment or highly tax payer-funded sectors like education and health. This year's best-performing regions were those that suffered the smallest losses in the private economy while bulking up on government steroids.

So far the recovery has favored the government-dominated apparat and those places where public workers congregate.After all, besides Wall Street, public-financed workers have been the big beneficiaries of the stimulus, with state and local governments receiving more than one-third of all funds. Public employment grew by nearly 2% over the past three years, while private employment has dropped by 7%.

Private sector workers have also seen their wages decline, while those working for the various levels of government have held their own. Federal workers now enjoy an average salary roughly 10% higher than their private sector counterparts, while their health, pension and other benefits are as much as four times higher.

Not surprisingly government workers, according to a recent survey, are more likely to see the economy improving than those engaged in the private sector. It's not so pretty a picture on Main Street; personal bankruptcy filings rose 23% in the year ending in March.

Small Is Still Beautiful

Despite these differences, some patterns from previous years still persist. The most prominent is the almost total domination of the top overall rankings by smaller communities. With the exception of Austin, Texas, all the top 10 growers--and all the net gainers--were small communities. Americans have been moving to smaller towns and cities for much of the past decade, as well as jobs, and this recession may end up accelerating the trend.

At the top of the list stands No. 1 Jacksonville, N.C., whose economy grew 1.4%, paced by 3.3% growth in government jobs. Fast growth, however, is not a stranger to this Southern community, whose employment base has grown 22.8% since 1998. The area includes the massive Marine Base at Camp Lejeune, a beehive of activity since the U.S. started waging two wars in Afghanistan and Iraq. Fort Hood-Temple-Fort Hood in Texas came in fourth place overall with Fayetteville, N.C., home to the Army's Fort Bragg, placing sixth and Lawton, Okla., home of Fort Sill, close behind at No. 7. Similar explanations can apply to war economy hot spots Fort Stewart (No. 20 overall) and Warner Robbins (No. 26), both in Georgia.

But perhaps nothing captures the current zeitgeist more than the presence, at No. 23, of Hanford-Corcoran, Calif. A large Air Force base and a state prison have bolstered Hanford-Corcoran's economy, which shows that even in the Golden State--an economic basket case whose unemployment keeps rising--a large concentration of government jobs still guarantees some degree of growth.

Not all our top-ranked small stars got their stimulus from Uncle Sam. Energy-related growth explains strong performances from Bismarck and ag-rich Fargo, N.D., at Nos. 2 and 8, respectively. You can also credit some energy-related growth to the high standing of Morgantown, W.Va., (No. 17) and Anchorage, Alaska, (No. 18), which have benefited from consistently high prices of oil and other sources of energy.

Texas at the Top of Big Cities

Our list of best places among big cities is dominated this year, as last, by Texas, with the Lone Star State producing fully half of our top 10. This year, like last, the No. 1 big city (those with a more than 450,000 non-farm jobs) was Austin, Texas, which enjoys the benefits of being both the state capital and the home to the University of Texas, as well as a large, and growing, tech sector.

But the Texas story also includes places that do not enjoy Austin's often overwrought "hip and cool" image. Broad-based economies, partly in energy, have paced the growth of No. 2 San Antonio, No. 3 Houston, No. 5 Dallas and No. 7 Fort Worth. Other consistent big-city Southern performers include No. 8 big metro Raleigh-Cary, N.C., as well as two ascendant Great Plains metropolises, No. 9 Omaha and No. 11 Oklahoma City. None of these places were too hard-hit by the mortgage meltdown, and they all have retained reputations as business-friendly areas.

The other big winner among the large areas is an obvious one: No. 6 ranked greater Washington, D.C. While most American communities suffer, our putative Moscow on the Potomac has emerged as the big winner under Barack Obama and the congressional centralizers. Remarkably, federal employment in the area has grown at a smart pace throughout the recession. One partial result: Washington office space is now--for the first time ever--more expensive than that in Manhattan. Northern Virginia, home to many beltway bandit companies, ranks No. 4 on our list.

The Eds and Meds Economy

With the productive economy outside energy only now getting its footing, the biggest relative winners have been what could be called the "eds and meds" economies. This includes de-industrialized places such as Pittsburgh (ranked a surprising No. 13), Rochester, N.Y., (ranked No. 17) and Buffalo, N.Y. (No. 20). If you have few more factory jobs to lose, little in-migration and a huge collection of institutions relatively immune to the economic turndown, you have a better chance to look good in bad times. The stimulus tilted more toward education and health than to construction and infrastructure, something that has worked to the favor of these cities.

We can see this in New York City, whose huge and growing concentration of colleges and hospitals helped propel it to No. 10 among the big regions, its best ranking ever, despite losing almost 130,000 jobs. This is all the more remarkable since the Big Apple was the epicenter of the financial collapse, although that also made it the prime beneficiary of the federal bailout and Wall Street's boom. Soaring salaries for hedge fund managers and new hires at financial firms could be pacing new growth in the city's elaborate service industry, from toenail painters, restaurateurs and psychologists to dog walkers and yoga instructors.

The health of the eds and meds economy, however, has even been enough to lift some traditional bottom-dwelling sad sacks, such as No. 14's Philadelphia, to unfamiliar, if rather relative, heights. With private-sector growth weak everywhere, cities with lots of big hospitals, universities and nonprofit foundations look better for the time being than they have in a generation.

The Road Ahead

We expect our list to change next year, but how it will do so will depend as much on politics as economics. The current policy approaches--with healthy increases in government employment and strong support for education--have worked relatively well for taxpayer-financed economies including those with a strong "eds and meds" sectors. State universities, now confronted with the real pain of the recession felt by state taxpayers, are already crying for heavy increases in federal support.

But if Congress takes a turn to the center, or even right, after November, the advantageous position of the favored government-supported sectors may erode. Particularly vulnerable will be state workers, whose current federally sanctioned reprieve could be terminated if voters force legislators to start addressing concerns over the huge governmental deficits both locally and nationally. Given D.C.'s unique ability to print money, Washington and its environs will likely continue to expand, as they did under the spendthrift Bush regime, but many state and local governments may be forced onto a stringent diet.

On the other hand, a welcome return to basic growth in overall economy would further boost those relatively low-cost areas--notably in Texas, the Great Plains and the Intermountain West--that have in recent years enjoyed the strongest trajectory in the non-government related sectors, including natural resource-based industries . These places have pro-business regulatory and tax regimes, lots of available land and affordable housing, which will attract new businesses and workers to their areas.

This change could also benefit some places, such as Silicon Valley, parts of Southern California and the Pacific Northwest, which despite high costs still retain globally competitive, tech-related sectors. A resurgent job market in these areas would erase the current apparent advantage enjoyed by "eds and meds" based economies in favor of those places that will serve as the real incubators for a revived private sector economy. With the resumption growth, hopefully, our economy next year will begin resembling the more capitalist, competitive one we have enjoyed in the past.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

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Which jobs/industries are driving which cities

Good post. Would be useful to know which industries/jobs are driving growth in which city; especially the small ones. While Bismarck, ND is obvious for its shale/oil/gas, the others not so much. Any idea on where can I find such info?

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Jobs are not as easy to get in Austin

I'm one of the many young professionals trying to leave California ( Surprise surprise) and Austin is on my list because it has many jobs in my field. Otherwise I'd probably consider Houston, Dallas, or San Antonio. I have an impressive resume with a huge variety of skills. I was laid off from the small startup I worked for and immediately began applying to companies in Austin. The response rate was non-existent. I got a total of two responses and as soon as they discovered I was out of state the conversation ended. I did almost make it to the top pick for one semi-major startup in Austin but ultimately didn't make the final cut.

The thing is that the pay for the position- which was a fairly senior one- was about 50% less than what I make in the Bay Area. Of course I fully expect wages to be lower there than here since afterall- you can still buy a house in Austin for 150k or less versus the million bucks it costs for a small house in Palo Alto, CA. But at the pay they were offering it would be a pretty serious adjustment. I am actually fully willing to take that cut in pay because I've saved up enough to pretty much buy a house in Austin at this point.

After reading various job forums it seems that while there are indeed jobs in Austin, the competition for them is very fierce. probably because there's a lot of people like me moving from out of state who haven't thought about this aspect at all.

I got a job 5 months ago at a tech firm in Silicon Valley. I plan on moving to Austin in another 7-8 months regardless of whether I have a job or not because living here is driving me mad. But I fully expect to not only have a difficult time finding work- even if that means I sweep floors- but to also to be taking a large paycut as well. The reality seems to be that Austin appears to be a great city to relocate to... if you bring money with you. Otherwise its actually a fairly expensive city.

You should really consider another city in Texas

Austin is over-hyped. There really are a lot of tech jobs in Dallas and Houston as well - and not just IT - I mean programming the same types of stuff you probably do in Silicon Valley - Dallas and Houston just aren't as well known for it. And justifiably so, perhaps - per capita Austin is the tech leader, but Dallas and Houston are both 3x as big as Austin or so... so there are a lot of opportunities.

Plus you are still a 3 hour drive or so from Austin if you want to spend a weekend there or go to ACL or SXSW whatever. Austin is great for visiting... but I've had opportunities to move there, and chose not to. I just prefer a bigger, more diverse city I guess. Houston and Dallas blow Austin out of the water in many regards (food / culture / nightlife / diversity / etc). If you prefer nature / outdoors though (and UT sports), Austin is for you.

It's all about opinion and

It's all about opinion and priorities, yes. But I don't think it's over-hyped. I just think it has certain strengths more clearly defined because it has the luxury to focus on particular angles like being known as a "tech-town" or being "green" and championing "bike initiatives," whereas Dallas and Houston are much larger and more sprawled, containing dozens of smaller cities and large areas with varying demographics.

I do think many who move to Austin would be just as happy in Dallas or Houston. Many are drawn by the image that Austin has, which is quite strongly projected (for good or bad, sometimes to my own chagrin). I think its smaller size actually aids it in some ways because its particular strengths stand out more instead of falling into obscurity in the slew of diverse opportunities. I grew up in Dallas and the supreme car-dependency and homogeny of suburban sprawl (trying to tell Keller from Richland and Euless from North Richland Hills etc.) were some of the reasons I enjoy living in Austin more. I don't even own a car here. I'm happy to see Dallas expanding it's public transit, but there are still a lot of areas completely left out of the picture. If Dallas can truly form a cohesive and denser urban core with Fort Worth, it may become a really great metro region.

True...

All I'm saying is most people looking at Austin should probably also seriously consider San Antonio / Dallas / Houston, especially if it is mostly about the job - all of these areas have great employment prospects.

>>I grew up in Dallas and the supreme car-dependency and homogeny of suburban sprawl (trying to tell Keller from Richland and Euless from North Richland Hills etc.) were some of the reasons I enjoy living in Austin more.

I think if you grew up in Leander or Round Rock, you'd probably think the same thing of Austin. You can live in Midtown / Montrose in Houston and they are (almost) 100% as "hip" and probably more urban than Austin, and I'm sure Dallas has similar areas. Dallas has something like 100 miles of light-rail (granted, it is a mostly suburban system). But Austin's mass-transit leaves much to be desired anyway...

I guess my point is I think a lot of people like you end up liking Austin because it is the first urban experience you've really had in Texas - going to UT or whatever, and having grown up in the sheltered confines of Sugar Land or Plano etc. Yes, Austin beats the suburbs of Dallas or Houston. But Dallas or Houston also beat the suburbs of Dallas or Houston, or the suburbs of Austin.

You and Everyone Else, My Apologies

I don't really intend to rain on your parade, but I would really like to make a point here since I live in Austin. I was born in Texas, went to UT, graduated last year, spent some time unemployed, and now work in a sector entirely out of my intended area. While Austin does have a lot of job growth, it is very competitive right. VERY. Everyone seems to want to move here because they hear how great things are compared to elsewhere, which floods the job application pools. Not to mention our 50,000+ university pumping out graduates who often choose to stay here. But specifically, I have met so many people who have recently moved here from California. I'm not someone to think "get your own town" or something, but I do see how many are relocating here hoping to find a job. Fact is, the market isn't growing as fast as they are coming. When I was looking (which I've done for the last year and a half), I found almost no jobs in my area (geography/geographic information systems/sociology/research). I have a friend who last year moved here from California, tired of looking for jobs, and she took 4 months to find a part-time job doing something she doesn’t enjoy. Yes, the tech industry is growing, but I worry that reports of job opportunities are wildly inflated about Austin. So people are moving here and finding they are unemployed and on benefits or working part-time jobs (which has impacted the availability of jobs for university students, who make up a large portion of the young workforce here). No one is to blame. And I'm not totally discouraging you or anyone else, but the city is so quickly changing and outgrowing itself without the proportional job growth it needs that I may hardly recognize it in 5 years time. As a Texan, I’m proud that Austin is a great city. I just want to see it stay that way.

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I hear you and can relate. Perhaps even more so.

Yes, I hear what you're saying. You don't want anymore Californians and people from other places changing where you live. But welcome to the crowd. I myself spent the first 21 years of my life in East Tennessee. Knoxville to be exact. A state with less than 6 million people at the time, or approximately the same population as the Bay Area. My parents owned a rental house above ours they bought in the 90's for $18,000. Downtown was dead and sleepy. Going out to eat meant eating at any number of fast food, chain type restaurants. I'm not saying this was bad. I'd never lived anywhere else and this is what I knew.

I moved to California 10 years ago. To say the least everything is totally different. Yes- its very pretty. The weather is great. Jobs aren't that difficult to come by. But on the other hand its really crowded and extremely expensive and that is what ruins it. People that live here seem genuinely angry. Buying a house is almost impossible. Guess what? I lived in Massachusetts for a year and its the same there. Expensive, crowded, and seemingly old and tired. Tired because its wearisome that there's a lack of opportunity unless again- you want to spend an arm and a leg.

Thus where are these people going? Down South. Over the last 10 years I've come to visit my family and watch Knoxville change. Most of the change has been good. Where there used to be pawn shops and shuttered storefronts downtown now are wine bars, fancy brewpubs, and upper end stores. Its a fun place to go. But as a native I can also see much of it came from people who brought money.Just like Austin, Knoxville was heralded as this great place to ( fill in the blank) raise kids, do business etc etc. So here they come. The city is growing.

Its the same in NC where we used to vacation. All the pretty mountain land is being bought up by a lot of rich retirees from places like NY, MA, NJ,CA, and so on. All of these places are changing. All are getting their own brand of new-found wealth and gentrification.My home town will never be the same as it was a short 10 years ago.

I waited for years for the housing bubble to pop here. But guess what? Since the anti-growth regulations that hampers new home construction in the Bay Area is still alive and well, the prices are almost as high as they were 4 years ago during the boom. I was pedaling around this weekend and almost every house that was for sale had a "pending" sign hanging on it. I have no clue where people get $700,000 for a starter home but frankly I'm tired of trying to make sense of it. So I'm through with this area. All we want as a young couple is a more affordable, sustainable, NORMAL life. Maybe the city isn't Austin but rather San Antonio, or somewhere else. I grew up in the sticks so I don't require hoity-toityness. But Austin has a lot of industry in my field thus that is where we probably should go.

My hope is that someday places like California and the East Coast will wake up and wonder where all their young, smart people went. Perhaps then they'll make real efforts to change in order to make things more accommodating for us. In the meantime I'm done. We're out of here. Sorry if we change things in Austin but I can just as easily say the same for my own home town. Its happening everywhere.

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